The possible involvement of a 15-kDa phosphotyrosyl protein, pp15, in insulin action was investigated by using the insulin-mimetic agent, vanadate. Vanadate, a phosphotyrosine phosphatase inhibitor, was found to mimic insulin in 3T3-L1 adipocytes by three criteria. First, kinetic and concentration-dependence studies verified the insulin-like effect of vanadate in activating 2-deoxyglucose uptake. Insulin had an additive activating effect at a submaximal vanadate concentration, but showed no further activation at a saturating vanadate concentration. The trivalent arsenical, phenylarsine oxide (PAO) which forms complexes with vicinal dithiols, markedly inhibited vanadate-activated hexose transport in agreement with our previous studies in which PAO abolished the insulin-activated component of sugar uptake. Second, in situ phosphorylation experiments showed that vanadate activated tyrosine phosphorylation of the insulin receptor's beta-subunit. Exposure of vanadate-treated cells to PAO further increased the level of beta-subunit phosphorylation. The increased level of phosphorylation in the presence of PAO occurred only on tyrosyl residues. Third, vanadate caused the accumulation of a phosphorylated 15-kDa protein in the presence of PAO, but not in its absence. The characteristics of this protein were identical to those of pp15: 1) both proteins behaved identically by two-dimensional gel electrophoresis, 2) digestion of both proteins with trypsin gave rise to apparently identical phosphopeptides, and 3) both proteins contained phosphotyrosine as the only phosphoamino acid. The results indicate that both vanadate and insulin stimulate the accumulation of pp15 in the presence of PAO. The dithiol,2,3-dimercaptopropanol, but not a monothiol, reversed the effects of PAO on the inhibition of vanadate-induced hexose transport and the accumulation of pp15, thus implicating a vicinal dithiol in these actions of vanadate and insulin. Our results support the hypothesis that turnover of the phosphoryl group of pp15, a product of insulin receptor tyrosine kinase action, is coupled to signal transmission to the glucose transport system.